The S&P 500 index hit an all-time high on January 26, which was a Friday. The following week, it started to fall, including a messy 2.1% selloff on Friday that brought the weekly loss to 3.8%, the worst such decline since the selloff that ended on February 7, 2016. So who were the net sellers of stocks during that week just before the 4.1% plunge on Monday? And who was buying just before the plunge?

The smart money:

Hedge funds were the biggest net sellers during that week, according to BofA Merrill Lynch analysts, cited by Bloomberg. The data was based on account activities by clients of BAML. During the week, four of BAML’s client categories sold a net of $3.6 billion in stocks, the most since early June 2016 as Britain’s Brexit vote had been approaching:

Hedge funds disposed of nearly $2 billion in shares during that week, or about 55% of the total. This was up from the four-week average of about $300 million in net sales.

Institutional investors disposed of $1.3 billion, or about 35% of the total. But they were already heavy sellers averaging $1.2 billion in disposals over the prior four weeks.

Retail investors unloaded about $300 million, up from the four-week average of about $200 million.

The dumb money:

But one BAML client category was a net buyer just before the Monday plunge: corporations buying back their own shares. They have fueled the stock market boom over the past few years. They represent the relentless bid. Their purpose is to buy high to push share prices even higher. These BAML clients purchased about $600 million of their own shares just before the plunge.

These corporate share buybacks last week are particularly interesting in that companies are now reporting their Q4 earnings, and they enter into a pre-announcement quiet-period during which share-buybacks are also restricted.

This might explain why buybacks during that week were down slightly from the four-week average.

BAML’s corporate clients were the only client category that did not dump shares over the past four weeks, and the four-week average shows net purchases of about $700 million.

Then Monday happened. And whatever hedge funds and institutional investors were doing, retail investors were trying to access their accounts in such large numbers that they ran into outages or slowdowns at a number of online brokers, mutual fund firms, and fintech robo-advisers, at least briefly. They included Charles Schwab, TD Ameritrade, Vanguard Group – whose clients might have experienced “sporadic difficulty” according to a spokeswoman – T. Rowe Price, Wealthfront, and Betterment.

And who else was selling?

Equity ETF holders. For example, they yanked a record $17.4 billion out of the largest ETF, the SPDR S&P 500 ETF, over the four-day trading days from February 1 through February 6. According to Bloomberg, this beat the prior record for a four-day period, September 25 – 28, 2007, when investors had yanked out $16 billion.

On just the day of February 6 – which was an enormously volatile day, with stocks surging, plunging, and surging again – investors removed $8 billion from the SPDR S&P 500 ETF. According to Bloomberg, that day was the third-largest single-day withdrawal since the Financial Crisis.

That said, on a percentage basis, the redemptions weren’t in the same league.

Just ahead of the selloff on September 25 – 28, 2007, the ETF had total net assets of $93.9 billion, according to SPDR data. So the $16 billion withdrawn during the selloff at the time represented 17% of total net assets before the selloff. This time around the ETF had total net assets of $306.7 billion on January 31, and the $17.4 billion yanked out amounted to less than 6%.

It’s still a large amount – but it goes back to what I said a couple of days ago, this selloff didn’t measure up to the selloffs that occur during the drawn-out periods of a real crash.

With all this wailing in the media, you’d think there’s at least some blood in the streets. But no. Not a drop. Read… So What Do I Think about the “Crash” in Stocks?